Property Taxes and Property Values in Middletown

There has been a fair amount of discussion in the city and in the Journal News about Middletown having the highest property tax rates in the county.  There are two components for this. 

First, you, as a majority of voters, approved the property taxes that you are being charged with.  We are highly taxed in part because we voted to accept those taxes to replace schools, keep our library functioning, etc.   The actual millage approved for Middletown is laid out in the chart below.   The 1 mill levy up for renewal for Central Connections is contained within the 6.90 mills charged by the City.

Second, because our property values have declined, we have the highest effective tax rate in Butler County.   When a tax levy is placed on the ballot, there is a certain millage intended to create a certain funding amount.

As an example only, let’s say the library levy was intended to bring in $1 million per year for the library.

The State and County can apply “factors” to the voter approved tax rates to level out the decline but never to exceed the original voted millage so that the library gets as close to the expected revenue as possible for budgeting and operation purposes. The idea is to avoid large unpredictable swings in revenues to the receiving entity (the library in this example).

When property values go down significantly, theoretically the library might only get 70% of what they budgeted. What happens in value downturns is that the County can apply the factors to slowly reduce property value loss and therefore property tax loss. During big upswings in property values, they apply the factors to slowly raise property taxes up to the anticipated revenues.

From 2011 to 2015, the value of Middletown housing as a city has dropped $58,367,350.  During the same time, the value of Agricultural, Industrial, Commercial and Other types of land collectively have gone UP about $ 3million.   Our value problems are completely tied to our residential housing.

Since we are at the bottom of property value loss in the City, and have hovered there for a few years, we are seeing the highest factor available in the tools to maximize property tax revenues despite the loss in overall city real estate value. As property values start to rise, the property tax revenues will lag behind the real value as they slowly wind us back up again.

Our effective property tax rate is therefore, the highest in the area, meaning our residents are paying higher property taxes than other communities. Although our problem is very real, we are not alone in dealing with this issue.  Surrounding cities have also experienced this downturn.

  2011 to 2015         Total Value Loss

Middletown                    -8.8%

Hamilton                        -9.2%

Monroe                           -10.2%

This is an imperfect and simplified explanation of how tax levies function, but hopefully it conveys the concept.

Three possible ways to lower our effective property tax rate would be :

  1. To lower the total millage approved by voters;
  2. To add significant new residential housing (and therefore value) to your overall housing stock lowering the effective tax rate;  and
  3. to significantly upgrade a large portion of existing housing stock, raising value to existing housing and lowering your effective tax rate.  These would be major upgrades like room additions or finishing basements, etc.

This makes discussions surrounding the proposed Senior Citizen levy renewal and our handling of housing stock as part of the new City Master Plan especially timely. Both will significantly affect future property tax rates for our residents.

I will start our discussion of Housing Stock at the May 2, 2017 City Council meeting

Current Property Taxes  in mills
County MCSD JVS Municipal Park Library Total
9.72 54.506 1.93 6.9 0.5 0.75 74.306

2 thoughts on “Property Taxes and Property Values in Middletown

    • That’s a tough question to answer with specific information. Property taxes are based on property values. To the extent that Section 8 reduces property values of the housing used and surrounding neighborhoods, it contributes to the problem. How much did property values go down as a result of Section 8? That’s a tough number to calculate accurately. It certainly contributes to our problems.


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